Do Foreclosures Lead to Increased Violent Crime?
A Look at the Research Behind the Headlines

Scan the news headlines and you are sure to see a story about the state of the nation’s
housing market. Many of these stories focus on the economic impact both to individuals
and to the national economy. A number of stories also examine some of the other
implications of high foreclosure numbers on our communities, including the potential
effect on crime rates. A sobering fact repeated in many of these stories is that an increase
in the foreclosure rate in a neighborhood can lead to an increase in the rate of violent
crime. Typical is this statement reported in the Houston Chronicle this June:

When a neighborhood has 2.8 foreclosures for every 100 owner-occupied
properties in a year, violent crime in the immediate area goes up 6.7
percent1.

A Potentially Serious Problem

With an estimated 1 in 33 homeowners nationally expected to be in foreclosure during
the next 2 years,2 the potential link between foreclosure and violent crime should give us
pause, especially when other recent work has documented increases in violent crime in
some communities after a decade or more of steady declines. According to the Mortgage
Bankers Association, the number of mortgages in foreclosure or seriously delinquent
doubled between the fourth quarter of 2005 and the fourth quarter of 2007.3 The Police
Executive Research Forum (PERF) has noted that the FBI statistics for 2005 reflected the
largest single-year percent increase in violent crime in 14 years, and PERF’s own
research saw that rise continue in some cities into 2006.4 Is this purely coincidence? As
problem solvers familiar with the SARA process, we know we can’t simply scan the
headlines and leap to conclusions about foreclosures and violent crime. We must conduct
an analysis in order to understand the problem if we are to develop any responses that
might effectively control it.

Back to the Source

Mark Twain once wrote, “Figures often beguile me, particularly when I have the
arranging of them myself; in which case the remark attributed to Disraeli would often
apply with justice and force: ‘There are three kinds of lies: lies, damned lies, and
statistics.”’5 Statistics are malleable, and a news bite, in its attempt at brevity, may not
accurately capture detailed research findings. The first step in our analysis, therefore, is
to establish the source of the often-quoted statistic linking violent crime increases to
foreclosures and understand the theory and work behind it.

The statistic comes from a 2005 study conducted by Dan Immergluck and Geoff Smith
that sought to “measure the effect of foreclosures of single-family homes on levels of
violent and property crime at the neighborhood level.”6 Their study appears to be the
first attempt to quantify the impact on crime of owner-occupied foreclosures. This is
different than simply looking at vacant properties, which may be abandoned for any
number of reasons and it is an important distinction when seeking answers to the question
of why violence is rising in previously stable communities of primarily owner-occupied
residences. Understanding why the homes have come to be abandoned influences what
can be done about them. In a foreclosed property, for example, the costs a jurisdiction
incurs in dealing with the property may be billed to the bank that owns the property. In
other cases of abandonment, the owner of the property may not be so easily identifiable.

Immergluck and Smith looked at Chicago, where in the summer of 2000 a high-profile
series of murders in abandoned buildings in one South Side neighborhood brought
increased attention to the problem of abandoned buildings, and led the city in September
of that year to pass the nation’s first municipal ordinance aimed at reducing predatory
lending.7 The belief that properties abandoned by foreclosure led to increased crime was
a critical factor leading to support for the passage of the ordinance, even though
systematic research of such a causal relationship was largely nonexistent.

Their research focused on a number of census tracks in central Chicago, combining
census data, Dun and Bradstreet business count data, and crime data provided by the
Chicago Police Department for each of those tracts from 2000 and 2001.8 The tract
foreclosure rate was also calculated as the number of foreclosures divided by the number
of owner-occupiable units in the tract. The mix of data is important because crime
incidents are a function of both the population level, the number of businesses, and the
characteristics of the population in a neighborhood.

Their models were built on theories of crime causation well-documented in recent
literature. Regression analysis led them to conclude that the foreclosure rate is a
statistically significant determinant of violent crime, with a “0.0287 increase in the
foreclosure rated yield[ing] an expected increase in violent crime of 6.68 percent. A
smaller increase in the neighborhood foreclosure rate, say 1 in 100 properties, would
yield and increase in violent crime of 2.33 percent.”9 Furthermore, they determined that
while higher foreclosures could cause higher violent crime rates, the reverse was not true;
that is, increasing violent crime rates did not lead to higher foreclosure rates.10

Now What?

Knowing that statistical evidence exists for a causal relationship between foreclosures
and violent crime, the next step may be for jurisdictions faced with a recent rise in violent
crime to analyze their crime and foreclosure data to see if the relationship exists, and if
so, in what neighborhoods. Foreclosure is not likely the cause of all violent crime, but if
it is a causal factor in some, then responses can be designed to address that proportion of
the problem. Law enforcement may not be able to prevent foreclosures, but it certainly is
in the position to help mitigate the effects on violent crime that may rise from those
foreclosures.

In neighborhoods hit hard by the foreclosure crisis, citizen concerns over foreclosures are
not limited to property values and neighborhood aesthetics. The remaining residents are
also often concerned with the effect on the safety of their neighborhood. Implementing
analysis-driven responses should lead to a reduction of violent crime and fear of crime.
Working with the property owners, other community members, the real estate business
community, and code enforcement to ensure that the foreclosed properties do not become
targets for crime and criminals should not only help protect the viable housing stock, it
may also go far in helping keep violence under control and our communities safer.